Trendlines are a staple for technical Forex traders that can be used on any currency pair and on any time frame. Follow these 3 easy steps to drawing trend lines which is a powerful tool to time entries and exits of a trade.
A trendline is probably the most basic tool in the technical trader’s toolbox. They are easy to understand and can be used in combination with any other tools you might already be using.
By definition, a trendline is a line connecting two or more lows or two or more highs, with the lines projected out into the future.Ideally, traders look at these extended lines and trade on prices reacting around them, either trading a bounce of the trendline.
Tactical FX Trend Trading Strategies by Vic Noble and Kelvin Thornley reveals the step-by-step trend following strategies of a full-time Forex trader. This course includes a detailed approach of a daily trading plan, technical tools, how to use stochastic and MACD…
So, what can we do to make sure the trendlines that we’ve drawn are correct?
Tip #1 – Connect Swing Lows to Swing Lows (or Swing Highs to Swing Highs)
We want to draw a line connecting either two (or more) swing lows or two (or more) swing highs. For those unfamiliar with the term swing highs/lows, we simply mean the peaks and valleys created with zig zagging prices.
Once we connect peaks with other peaks or valleys with other valleys, we want to see the line not being broken by any candle between those two points. Take the examples below.
Read the full article here: 3 Tips For Trendline Trading